Financial Performance

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Revenues in key markets

Our key markets developed well for the most part. As in the first quarter, the business trend was the strongest in the U.S. and Canada, which contributed 28 percent, or €79.2 million, to total revenues in the first half. This represents an increase of 44 percent over the prior-year period and is the result of continued strong organic growth as well as the initial consolidation of webMethods. Spain was in second place with 13 percent growth in the second quarter, makcusing it the highest-revenue country in Europe. Spain contributed a total of 15 percent, or €41.5 million, to total revenues in the first half (2006: €40.2 million). The revenue trend was weaker in Germany and the United Kingdom during the second quarter. Total revenues for the first half of 2007 amounted to €31.8 million in Germany (H1 2006: €33.7 million) and €20.4 million in the United Kingdom (H1 2006: €22.4 million). The decline was primarily due to significant non-recurring income reported in the prior-year quarter and the postponement of projects planned for the second quarter of 2007 until the second half of 2007. Revenue in the JACA (Japan, Asia, China, Australia) region was particularly robust in the second quarter, leading to an encouraging rise in revenue of 44 percent to €26.1 million in the first half.

Based on the requirements of IAS 14.69a, the segment report in the notes to the consolidated financial statements includes a breakdown by geographical segment (EMEA, ASIAPAC, and the Americas regions) in addition to the primary segment reporting by business segment (ETS and webMethods). As soon as the new IFRS 8 is approved by the European Union, we will no longer publish a breakdown of revenue by geographical segment.

EBIT continues to improve

Operating earnings (EBITA) amounted to €37.9 million, surpassing last year's figure of €29.7 million by 28 percent. Significant reasons for the increase included the continued optimization of business processes and initial synergy effects from the acquisition of U.S. software firm webMethods, Inc. Despite the non-recurring expenses related to this transaction, we have succeeded in continuing on our profitable growth track.

Revenues and marketing expenses also saw an acquisition-related increase of 16 percent over the second quarter of 2006 to €37.2 million. In addition, research and development expenses rose in the same period by 32 percent to €14.8 million.

We improved earnings before income and taxes (EBIT) by 24 percent to €36.7 million in the period under review (Q2 2007: €29.7 million). This figure includes amortization of €1.2 million on the products and customer base acquired. The EBIT margin remained at a high level amidst a significantly expanded revenue base, declining only 0.4 percentage points from the prior-year quarter to 24.1 percent.


€ millions Q2 2007 Q2 2006 Change in %
EBIT 36.7 29.7 24
EBITA 37.9 29.7 28
Net interest result 1.3 2.2 - 41
Earnings before taxes 37.9 31.8 19
Net income 24.6 19.4 27
Earnings per share (in euros) 0.86 0.69 25

Segment earnings contributions

Our webMethods business line made an earnings contribution of €13.4 million after a loss of €2.0 million in the prior-year period. webMethods is thus well on its way to improving profitability. The cost of sales increased by 55 percent to €24.0 million (Q2 2006: €15.5 million), primarily due to the acquisition of webMethods, Inc. Selling costs also rose to €24.2 million from €17.4 million in the prior-year period.

The already high contribution of the ETS business line to segment earnings increased slightly by 2 percent to €56.7 million from €55.5 million a year earlier. Selling costs declined by 11 percent to €13.0 million.

Increase in net income and earnings per share

Income after taxes increased by 27 percent to €24.6 million in the reporting period, up from €19.4 million a year earlier. Earnings per share rose by 25 percent to €0.86 (Q2 2006: €0.69), since the number of shares in circulation increased by an average of 384,140 in comparison with the quarter ending June 30, 2006 to 28.5 million.

First half of 2007

In the first six months of 2007, Group revenues amounted to €276.9 million, up 18 percent over the 2006 figure of €234.8 million. Acquisitions accounted for 12 percent of this figure. Total operating revenue rose by 19 percent in the first half to €279.5 million.

Earnings before interest and taxes (EBIT) increased 21 percent to €61.7 million in the first half of 2007 from €51.2 million a year earlier. The operating EBIT margin improved to 23.4 percent in the first six months of 2007, up from 21.8 percent a year earlier. Operating cash flow reached €34.3 million, 35 percent more than in the prior-year period.


€ millions Jan. 1 - June 30, 2007 Jan. 1 - June 30, 2007 Change in %
EBIT 61.7 51.2 21
EBITA 62.9 51.2 23
Net interest result 4.4 4.2 4
Earnings before taxes 66.1 55.4 19
Net income 42.3 33.8 25
Earnings per share (in euros) 1.49 1.20 24

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